IT: Where there were sufficient funds available with assessee-company on which no interest was paid and out of which loans and advances to associate companies could be made, Assessing Officer was not justified to disallow claim of interest on borrowed funds
Friday, 28 March 2014
RBI goes lenient on forward contracts for exports or imports; allows cancellation up to 75% of eligi
FEMA/ILT : Risk Management and Inter Bank Dealings
In composite contract of sales and service only service element was liable to ST
Service Tax : Goods deemed to be sold in execution of works contract of repair of transformers are not liable to service tax and even otherwise, where facts indicate that both parties to contract were conscious of terms which involved both sales and service, only service element can be charged to service tax
Reassessment justified as exp. claimed by hospital was reported by medical council as bogus
IT : Where assessee trust, running hospital, had not produced list of donors, expenditures claimed were reported by Medical Council to be bogus and discrepancies were found in investment declared and balance sheet submitted, initiation of reassessment was justified
Penalty deleted as deductions claimed were although not allowable yet it were allowed in earlier yea
IT: Where penalty was imposed on assessee for raising a false claim of deduction under section 80-IB, in view of fact that similar claim had been allowed in earlier years, assessee could not be held guilty of filing inaccurate particulars of income with an object to evade tax and, consequently, impugned penalty order was to be set aside
HC lays down guidelines on waiver of pre-deposit requirement
Excise & Customs : Full waiver of pre-deposit must be granted where demand is without jurisdiction or contrary to settled case-law; in case of arguable cases, partial waiver must be granted and in case of appeals involving no case in favour of assessee, full pre-deposit must be ordered
Bidders from different locations quoting similar prices depicts price determination and bid rigging
Competition Law : Quotation of identical prices by opposite party-bidders even though they were located at different geographical locations established that bidders had entered into agreement for bid rigging in contravention of section 3
Sums paid to employee deputed for Indian branch of bank won't be hit by sec. 44C; allowable under se
IT/ILT: Where payment is made to employee deputed to India exclusively for work performed by him for Indian branch of assessee bank, then said expenditure does not fall under section 44C but is fully allowable under section 37
Political parties violated FCRA norms by accepting donations from Indian subsidiaries of foreign Co.
FERA : Where more than one half of nominal value of share capital of companies Sterlite and Sesa was held by Vedanta, a corporation incorporated in a foreign country or territory within meaning of section 2(e)(vi)(c) of Foreign Contribution (Regulation) Act, 1976, donations accepted by political parties from Sterlite and Sesa accrued from 'Foreign sources' and was a blatant violation of FCRA, 1976
Review order couldn't be passed on grounds not examined earlier while passing of original order
IT: Review/recall judgment and order passed by High Court on grounds which were not canvassed at all at the time of hearing of main special civil application is not permissible
Sale tax incentive available under scheme not be deducted from assessable value under excise wef 1-7
Excise & Customs : Where assessee is allowed to retain a part of sales-tax collected by it under a scheme framed by State Government, then, in computing assessable value such retained sales tax is : (a) allowed as deduction under old law prevalent upto 30-6-2000; but (b) is not allowed as deduction under new law effective from 1-7-2000
Income duty reflected in accounts and disclosed in revised return after search couldn't be held as u
IT : Income entered in books of account, which is detected in search and duly disclosed in return filed under section 139(4) subsequent to search, would not constitute undisclosed income
No abuse of dominance by SAIL as it was not dominant player in production of iron ore, says CCI
Competition Act: Steel Authority of India is not dominant in iron ore production market of India and, thus, abuse of dominant position in respect of bidding for setting iron ore processing plants for supporting its activity could not be inferred
Enabling Environment For Steel Industry Slowly Taking Shape In India
Mr Sushim Banerjee FG of INSDAG wrote in the Financial Express that amid subdued demand, excess capacity and compressed margins, there is some good news for the Indian steel industry. After a long gap, it has turned a net exporter surplus for the first 11 months of the fiscal stands at 0.24 million tonne and the figure may reach 0.5 million tonne for the whole year.
One of the factors that might help steel exports is the eurozone’s gradual recovery, which is likely to enhance Europe’s appetite for imported steel such as HR coil. Global iron ore prices, currently at USD 115 per tonne CFR China, are projected to fall below USD 100 per tonne in coming weeks. That will put further pressure on NMDC to lower indigenous prices for direct sale, and to reduce benchmark prices for e-auctions in Goa and Karnataka.
Global coking coal prices are also coming down, which is evident from the current import rate of USD 150 per cfr/tonne. The recent gain in the exchange rate is likely to bring down the landed cost of imported coal.
For both these raw materials, the possibility of a slowdown in China is cited as a key factor for price depression. In the first 2 months of 2014, China’s crude steel production grew a mere 1.7% over the previous year. The unrecovered loans extended to the steel industry by Chinese banks have made bank credit tough to secure for industry.
In India, the price hike of USD 30 to USD 40 per tonne for both long and flat steel over the last three months has by and large been absorbed. Thus, with the major costs of production contained, along with a rise in domestic realisation, the Indian steel industry can look forward to reasonable growth in Ebitda margin in coming quarters.
There is a strong belief among the business fraternity, working professionals and employees that a better environment awaits us after the elections. As investment decisions are deeply influenced by uncertainty, this feel good anticipation is prompting buyers and processors to build up inventories and complete unfinished construction. These 2 factors would drive steel demand.
A renewed interest in completing stalled projects is also likely. Steelmakers are focusing on their brownfield expansion plans as the cost of losing market share could be steep. With inflation cooling off, lower rates by the RBI will enhance credit flow by keeping the cost of capital in check and facilitate economic activity.The contours of an enabling environment are taking shape the challenge is to make them into a reality.
Source:- steelguru.com
Wto Members Ask India To Remove Raw Sugar Export Subsidy Immediately
Australia has asked India to remove export subsidies immediately. It said the 3,300 rupees per tonne incentive payment is the equivalent of 14-16% of the world price. Since India is the third largest exporter of sugar this threatens to seriously distort trade. It said that the amount envisaged could potentially finance all its own exports half way across the Pacific Ocean.
Australia, Colombia, Brazil and the EU asked India about a new policy announced in February involving incentive payments to Indian sugar exporters. Members sought to know the legal basis for extending the export subsidy under the WTO regime. Several pointed out that India has agreed not to subsidize exports.
In a reply to this India said, The policy was designed to encourage diversification away from white sugar to raw sugar and that no intervention payments have been paid yet. India said export subsidies will be notified to the WTO.
India's new support programme for sugar sparked comment among a number of delegations with some urging India to remove immediately what they described as export subsidies that will potentially impact world trade, WTO said.
The Agriculture Agreement allowed developing countries to subsidize marketing costs and internal transportation costs during the agreement's implementation period. Brazil asked how India could justify the subsidies since there has been no consensus to extend these special provisions for developing countries.Sharing the concerns were Paraguay, Thailand, El Salvador, Canada, the US, Pakistan and New Zealand.
Source:- business-standard.com
Dhamra Berths Largest Parcel Size Vessel
Dhamra Port has become the first among Indian ports to berth a parcel size vessel of 2,07,785 DWT (dead weight tonnage). The vessel named ‘Macau Mineral’ carrying 1,94,073 tonne of coal from Richards Bay, South Africa is 312 metre long and about 50 metre in breadth.
The vessel berthed at the Dhamra Port jetty on March 26 and is likely to depart after unloading the cargo on March 29. It has 21 Chinese Crew headed by Captain Wang Yongan. Macau Mineral is a Panama registered super cape size vessel. The Harbour Master of Dhamra Port Captain Mirza Baig along with senior officials of Dhamra Port Company Limited (DPCL) were present during berthing of the biggest parcel size vessel.
Dhamra Port had started commercial operations in May 2011 and till date, it has berthed 424 cargo ships including over 100 cape size vessels. With fully mechanised loading and unloading facilities, the port has a channel of 18 km which is 18 metre deep for berthing cape size and super cape size vessels.
Presently, Dhamra Port has two fully mechanised berths of 350 metre each. DPCL has built a 62-km fully electrified railway line from Dhamra to Bhadrak connecting the main Howrah-Chennai line for transportation of cargo.
Source:- newindianexpress.com
SC allowed educational institute with amended objects to re-file application for exemption rejected
IT: Where subsequent to rejection of application for grant of certificate under section 10(23C)(vi), assessee-society amended its objects, assessee should make a fresh application before authorities along with amended objects of society
Commissioner received by auto-dealers on promotion and after sales services was liable to ST under '
Service Tax : Where auto-dealers, under an agreement, agree to undertake sales-promotion, after-sales services and advertisement of goods belonging to principal, Commission received therefor is prima facie liable to service tax under Business Auxiliary Services
China To Cut Price, Offer Better-Quality Cotton To Lower Reserves
China said it is cutting the price of domestic cotton being sold from its state reserves and will offer 200,000 tonnes of higher-quality, imported fibre for bidding weekly, as the world's top cotton consumer steps up moves to cut its massive stockpile.
The moves could pressure cotton imports and prices, hitting top exporters India and the United States, which have already seen shipments drop by 7 and 47 percent, respectively in the first two months of this year.
From April 1, mills can bid as low as 17,250 yuan ($2,800)per tonne for standard-quality cotton in the daily state auction, below the current floor price of 18,000 yuan per tonne fixed in November, the China National Cotton Reserves Corporation said in a statement on Friday
Beijing is unwinding a stockpiling program aimed at supporting farmers as it switches to a subsidy-based program. The reserve is holding more than 10 million tonnes of cotton, equal to about 60 percent of global stocks and sufficient for more than a year of local consumption.
On Monday, New York cotton futures, which are used as a global benchmark, sank more than 2 percent and were on track for their sharpest daily rout in two months after the China Cotton Association, which represents the interests of farmers, unveiled the lowering of the floor price.
The reserves bureau did not say how much local cotton will be offered in its daily sale, although it said mills were free to bid for any volumes.
In a desperate bid to liquidate its stocks, Beijing has since last year given incentives to mills to buy cotton from state reserves with import quotas that gave preferential tariffs.
Mills in the past, however, have shunned the government's auction due to poor quality and much higher prices. The government had sold only 36 percent, or 684,671 tonnes, of the total offered in the auctions as of last week since the latest round of auctions began in November.
Industry sources have estimated that stockpiles of imported fibre, which are preferred by textile mills due to better quality, stood at more than 1 million tonnes.
To prevent mills from rushing to only bid for the imported material, the reserves corporation will require buyers to purchase three tonnes of locally produced cotton stored in the largest growing region of Xinjiang in exchange for each tonne of overseas fibre from the stockpile, according to the statement.
The official announcement did not publish details on government's plan to offer import quotas for access to cheap overseas cotton.
Industry sources told Reuters that Beijing will give one tonne of import quotas to mills which buy 4 tonnes of state reserves from April. ($1 = 6.2130 Yuan) (Reporting by Niu Shuping and Fayen Wong; Editing by Himani Sarkar and Muralikumar Anantharaman).
Source:- reuters.com
Grape Exports Rise In District
The state has exported 35,627.43 metric tonnes of grapes by March 25 in the current grape season, including 32,000 metric tonnes from Nashik district alone; which is 10,600 tonnes more than last year's export of 25,107.57 metric tonnes in the corresponding period.
The grape export from Maharashtra in the current grape season is expected to reach the target of 55,000 metric tonnes achieved last year, including 48,465 metric tonnes which were exported from Nashik district in 2013.
An official from the agriculture department informed, "The state has exported 35,627.43 metric tonnes of the produce till March 25, against 25,107.57 metric tonnes during the corresponding period last year. Out of the total, 32,000 metric tonnes have been exported from the district, against 23,000 metric tonnes during the corresponding period last year."
Of the total of 35,627.43 metric tones exported, 18,720.51 metric tonnes have been exported to the Netherlands, 1,741.80 metric tonnes to the United Kingdom, 3,223.82 metric tonnes to Germany, 1,657.10 metric tonnes to Belgium, 984.72 metric tonnes to Sweden, 839.68 metric tonnes to Denmark, 831.75 metric tonnes to Norway, 468 metric tonnes to Lithuania, 365.46 metric tonnes to Finland, 279.43 metric tonnes to Ireland, 251.55 metric tonnes to Italy, 113.32 metric tonnes to Austria, 72 metric tonnes to Switzerland, 35.42 metric tonnes to Portugal, 29.11 metric tonnes to Estonia and 13.72 metric tonnes to Malta.
Speaking to TOI, president of the Grape Exporters' Association of India (GEAI) Jagannath Khapare said, "In the beginning, the grape season was good and we were expecting 65,000 metric tonnes of export this season.
But unseasonal rains and hailstorms ended up damaging the vineyards to some extent. Nevertheless, the grape export will be the same as it was during the previous year. By April end, we are expecting exports of 55,000 metric tonnes from the state."
From 2004, the Agricultural and Processed Food Products Export Development Authority (APEDA) has made registration of vineyards compulsory for grape growers wanting to export their prodcuce to promote export quality grapes production. In the current season, 19,793 vineyards (13,900 hectares), each admeasuring betwen 0.40 hectares and 1.20 hectares, have been registered for export of grapes in the district. Last year, 15,679 vineyards (13,123 hectares) had been registered with the office of the superintending agriculture office for the purpose.
Source:- timesofindia.indiatimes.com
With Reserve Bank Allowing Imports, Is India Going Back To Its G(Old) Ways?
There’s a slow but perceptible shift in India’s gold business. In February this year, for example, gold jewelry exports from India had risen for the first time this fiscal year, as per figures made available by the Gems and Jewelry Export Promotion Council (GJEPC).
The reason? Better availability of gold.
India’s jewelry exports had been hit by a reduction in the supply of the yellow metal after the country had curtailed imports by imposing restrictions, and on increasing the customs duty to 10 percent from 4 percent, in an effort to rein in its current account deficit that had hit a record high of US $88 billion last year.
FREE Download: The Monthly MMI® Report – covering the Precious markets.
India used to be the No. 1 buyer of gold in the world before the levy of the import tax, shipping in about 70 tons a month. After oil, gold was the nation’s biggest import, adding to the current account deficit, which was groaning under a weak rupee-dollar rate.
In January, jewelry exports had gone down by as much as 50 percent, but in February, there was a visible improvement in this. Bullion analysts and the GJEPC feel this trend would only gain in the next few months, especially because of more banks now being allowed to import gold.
A few days ago, the Reserve Bank of India (RBI) had permitted five domestic private sector banks to import gold.
According to a report in The Economic Times, the move is seen as a precursor to easing restrictions on inward shipments of the metal. The RBI had allowed Axis Bank, Kotak Mahindra, and IndusInd Bank, among others from the private sector, to import gold. This, said industry officials, was a “significant step” towards the easing of tough curbs on the metal.
Lately, as reported by MetalMiner, the smuggling of gold into the country had gone up considerably due to the high demand of the yellow metal despite import restrictions. Under what is now popularly called the 80:20 scheme, introduced in August last year, agencies could import gold on the condition that 20 percent of the shipment would be exported.
Only six banks, almost all public-owned, and three financial institutions were allowed to import gold under the 80:20 scheme.
After it allowed more banks to import recently, RBI Deputy Governor K. C. Chakrabarty was quoted by The Economic Times as saying more players being allowed to get into gold imports would ultimately lower the cost and help the country’s external balances. The move is also expected to bring down premiums for the metal in one of the biggest markets in the world. Premiums had hit a record of US $160 an ounce in December last year.
Chakrabarty’s logic was that if increased competition existed, gold would be imported at an even lower cost, which would then translate into a reduction in India’s current account deficit.
The move to allow more banks to import gold may raise shipments to about 40 tons per month from more than 20 tons in February.
Source:- agmetalminer.com
Agriculture Subsidies: Pakistan Versus India
Pakistan is currently contemplating to grant non-discriminatory nation status (equivalent to MFN status) to India in its bilateral trade. It is hoped that reciprocal gestures by India will lead to the shortening of its SAFTA Sensitive List and give access to Pakistani agricultural and textile products, while simultaneously relaxing its non-tariff barriers that are applied more strictly on imports from Pakistan.
Presently, Pakistan maintains a Negative List with respect to imports from India. This list includes 1,209 tariff lines. Despite this restriction, Indian exports to Pakistan were $2.06 billion compared to only $542 million exported by Pakistan to India in FY13. Therefore, India enjoys a large trade surplus of $1.52 billion with respect to Pakistan.
Major Indian exports to Pakistan include cotton, oil cakes, vegetables, synthetic yarn, fabrics and chemicals. The share of agricultural exports to Pakistan was 55 percent. There have also been years like FY11 when Pakistan imported $337 million worth of sugar from India. On the other hand, Pakistans major exports to India in FY13 included minerals, dates, cement, chemicals and petroleum products. The share of agricultural items to India was only 21 percent.
There has been a dramatic reversal in the pattern of trade between India and Pakistan. At the time of partition, Pakistans exports to India primarily comprised of agricultural products like cotton and wheat. Now, India is the major exporter of Pakistan of agricultural commodities like cotton, vegetables, sugar, animal and poultry feed, etc.
What explains the fundamental change in relative comparative advantage in agriculture between the two countries? The view strongly put forward by the Farmers Associations of Pakistan is that this is primarily due to two factors.
First, India subsidizes its agriculture much more than Pakistan, thereby making it artificially competitive. Second, Pakistan provides little or no protection to its farmers though import tariffs.
Lets examine the validity of these two explanations below.
On the subsidy issue, the latest information, as of FY12, is that India subsidised fertiliser use (all types) to the tune of $15,171 million. Other subsidies went to irrigation ($6,303 million), electricity consumption by farmers ($7,326 million) and to other inputs like seed, tractors, crop insurance, etc ($8,832 million). The total agricultural subsidy bill for India in FY12 is estimated at $37,362 million, equivalent to 2.2 percent of the GDP.
The corresponding estimates for subsidies in Pakistan in FY12 are $356 million on fertiliser (net of the GST on the input). Other subsidies are for irrigation ($193 million), electricity and others ($342 million). The total subsidy aggregates to $897 million, which is 0.4 percent of the GDP. Therefore, controlling for the size of the economy, Indian subsidies to agriculture are over five times as much as of Pakistan. Consequently, yields are somewhat higher by 10 to 27 percent in many crops.
The second explanation is also valid. Pakistans imports of cotton, tomatoes and onions are all importable duty free from any source, including India. This is primarily due to strong trading and industrial lobbies in the country. The cost of production of different crops in India is about 10 to 15 percent lower on average than in Pakistan; mainly due to substantially larger subsidies.
Clearly, if a level playing field is to be provided to Pakistani farmers, then there is a strong case for introduction of a minimum MFN duty on agricultural products of 10 to 15 percent.
In addition, Pakistan must emphasise to India that the trade imbalance has been magnified by the fact that many of its potential exports to India, of agricultural products and textiles especially, are in Indias Sensitive List of SAFTA. Also, both countries must ensure that all non-tariff barriers are not applied in a discriminatory manner towards each other.
Source:- brecorder.com
Moef Puts Spanner In Lion Hunter Jaideep Singh's Efforts To Bring African Lion Trophy Back From South Africa
In the drawing room of a home in Chandigarh's posh Sector 4 a lion poses on a platform. The king of the jungle seems to be slightly bemused at finding himself in a northern Indian city rather than deep in the Kalahari, where he's supposed to belong. No doubt the lion would have been equally surprised when confronted by Jaideep Singh, 44, who felled him with one shot from a 7 mm Van Chester rifle. Right now he's stuffed and mounted and as alive as the elephant's tusk that's displayed close by in Singh's home.
But where this tale gets really wild is in relation to the ways of the Indian bureaucracy and the trouble Singh has taken to get his "fully mounted trophy" home from South Africa. While the kill was made in June 2012, Singh had done all the complicated paperwork necessary to bring the lion back beforehand, including getting the approval of the Directorate General of Foreign Trade.
Then the environment ministry's wildlife division refused him a no-objection certificate.
Why? The May 30, 2013, communication, signed by Shiv Pal Singh, joint director, reads thus: "This ministry has taken a policy decision to discourage import of look-alike hunting trophies which are look-alike India fauna. In this regard, this is to inform that the African lion trophy is a look-alike of Asiatic lion and hence is not allowed for import."
ET has reviewed a copy of this explanation.
Aggrieved, Singh approached the Punjab and Haryana High Court and after five months, the court allowed import of Singh's trophy to India in January, pending the ultimate fate of the case.
After the trophy came to India, the authorities expressed their inability to "maintain" the trophy, Singh said. He then asked the High Court to allow him to maintain the stuffed animal. The High Court allowed this with a caveat. Singh had to deposit a cheque of Rs 10 lakh first, which he did and brought the lion home.
It's arguably the first time in the country that a court will decide such a unique legal proposition. Singh, who has an estate and owns property, had first applied to the DGFT in April 2012, saying he was interested in going after an African lion and some members of the deer family.
Unlike India, hunting is allowed in South Africa to maintain the ecological balance in wildlife habitats. There is also a charge involved, estimated at about $1,000, although ET couldn't verify this independently.
If the client is successful in shooting the lion, the hunting safari company, after treatment of the skin, exports the trophy to the hunter, provided an import permit is issued by the receiving country.
The import was denied after Singh returned to India. That's when he was given the "lookalike" explanation for this by the ministry. Singh approached the high court three months later. Singh said he needed to go to South Africa to fulfill his "pent-up desire" to hunt what he described as "the most beautiful animal of all" because the Indian government had failed to maintain an ecological balance in its jungles, resulting in the country banning the activity.
While this was Singh's maiden attempt at hunting a lion, his success hasn't gone down all that well at home. His daughter Nayantara, 14, is against the killing of animals, said the surprisingly soft-spoken Singh.
In the Kalahari, Singh followed the pugmarks of the nine-year-old wild cat for three days along with a team comprising a professional hunter and Kalahari locals.
Singh said he fell in love with the sport when he was 12. "Shooting is in our genes," he added. While his grandfather hunted elephants, Singh is the first in the family to have shot a lion. He got his trophy from the wildlife authorities about two weeks ago.
"There isn't much maintenance required as it is very fresh. It may require little more maintenance as it gets old," he smiled. "As against other animals, lions are very soft-skinned." Asked about the case, Singh flatly refused to comment. "The matter is sub judice."
Source:- economictimes.indiatimes.com
While granting registration to a trust CIT shall verify genuineness of its objects only and not its
IT : Only genuineness of objects and not activities is to be verified while granting registration to a charitable trust
Copy of an annual report which was claimed to have been lost couldn't be relied upon to prove shareh
CL: Where petitioner-director himself lost impugned Annual report long ago during shifting of company's office, copy of said Annual Return could not be relied upon to prove that petitioners were holding shares as reflected therein
No sec. 195 TDS if payments were made to Indian Cos. after NR subcontracted his work to them
IT/ILT : Where assessee entered into a contract with one 'G', Dubai [a non-resident] for Mass Alkali Flushing work of boiler unit of one 'J' and subsequently said work was sub-contracted by 'G' to two Indian Companies and 'G' also required assessee to make payments directly to them, since assessee never effected any payment to 'G' and under its instruction had given work orders to two Indian companies and made payments directly to them after deducting tax at source, it could not be said that ass
Addition justified as assessee failed to prove source of huge amount deposited in saving bank accoun
IT : Amount in savings bank account being remained unexplained, addition was justified
Case remanded on Cenvat eligibility as capital goods used for dutiable goods were later used for exe
Cenvat Credit : Where imported capital goods had been initially used for exempted goods only and later (after receipt of notice denying said credit), said goods were used for dutiable products as well, issue regarding availability of credit was remanded back to Tribunal
No denial of interest on refund money that remained with revenue even for period assessee took to re
IT: Interest cannot be denied by revenue for time taken by assessee to cure defects in TDS certificates
MCA notifies Rules under Companies Act, 2013
COMPANIES ACT, 2013/INDIAN ACTS & RULES : Ministry of Corporate Affairs notifies various Rules under Companies Act, 2013 on March 27, 2014
Subscribe to:
Posts (Atom)